“Markets in Everything”: An Unsavoury Trade

July 21, 2008 at 4:37 pm (Middle East) (, , , , , , , , , , )

In an emotionally sensible yet nevertheless strategically foolish decision, Israel has handed over Samir Kuntar, four other Lebanese militants captured in the 2006 war, and the bodies of 200 Lebanese and Palestinian fighters. In exchange it receives the bodies of Ehud Goldwasser and Eldad Regev, the soldiers captured by Hezbollah on the eve of the war, and a report on the status of the missing navigator, Ron Arad.

I won’t link to many articles covering the details of this lop-sided deal. However, there were a couple of things that stood out in amongst the flurry of newspaper ink. Amal Saad-Ghorayeb wrote a very perceptive piece in openDemocracy:

[T]he very nature of the current exchange, as well as its strategic implications, renders it a zero-sum game in which Israel loses and Hizbollah again emerges triumphant. In implementing it, Israel will effectively fulfil the Hizbollah leader Hassan Nasrallah’s “truthful promise” to secure the release of Lebanese prisoners held by Israel (the original aim of the operation Hizbollah carried out on 12 July 2006 when it abducted two Israeli soldiers on the Israel-Lebanon border) and reconfirm his oft-repeated slogan: “just as I always used to promise you victory, now I promise you victory once again”. The overall impact will be to give these popular catchphrases the appearance of strategic foresights….

If the deal’s substance is hard enough for Israel, its strategic implications are also a major cause of concern, on four grounds.

First, the prisoner-exchange constitutes a tacit admission of Israel’s responsibility for the July-August 2006 war, which wreaked mass destruction on Lebanon and resulted in the deaths of over 1,200 (mainly civilian) Lebanese….

Second, the exchange-deal – as well as establishing Israel’s responsibility for the 2006 war – confirms the Winograd commission’s assessment of Israel’s defeat in it. Its formidable military machine failed then both to eliminate Hizbollah’s military capacity and to win the unconditional release of its two prisoners….

Third, in agreeing to the deal Israel cannot seek solace in the fact that it is submitting to the will of the international community or the diktat of international law. The prisoner-exchange will be conducted under the auspices of the United Nations; but it bears recalling that United States Security Council Resolution 1701 (which ended the war on 14 August 2006) – while appealing for an “urgent settling” of the issue of the Lebanese prisoners – adopted Israel’s idiom by stipulating the “unconditional release of the abducted Israeli soldiers” (rather than calling for a swap). In this manner, Hizbollah appears to have succeeded in defying not only Israel, but the will of the international community as well.

Fourth, by recognising Hizbollah rather than the Lebanese government as its negotiating partner, Israel has inadvertently undermined the latter and thus further exacerbated its own position. Hizbollah’s own response to criticism within Lebanon of its priority in this respect (such as from the politician Amin Gemayel) has always been that no Lebanese government has ever sought the release of Lebanese prisoners through diplomatic means; a case in point is the current government of Fouad Siniora, which has not used the diplomatic leverage it enjoys with the United States and Europe to resolve the prisoner issue. The result is that Hizbollah emerges as the force in Lebanon that can deliver, thereby perpetuating an important political dynamic - of the non-state actor which functions as the de facto state versus the state non-actor which merely enjoys the status of de jure state.

This distinction in part answers the question raised by a leading member of Lebanon’s governing 14 March faction, the Druze leader Walid Jumblatt,: “how is it that some of us [in Lebanon] have the right to conduct negotiations for the return of prisoners, to conduct negotiations with Israel”, while the state – if it engages in similar negotiations – is “accused of collaborating with the enemy”? The key point is that the Lebanese de jure state, without a defensive strategy or policy, lacks the power (vis-à-vis its enemies) and the moral authority (over a significant segment of Lebanon’s population) to negotiate deals of this kind, least of all with a foe as militarily superior and popularly anathematised as Israel. If the Lebanese state, in its current capacity, were to negotiate directly or indirectly with Israel, it would be the result of US-Israeli pressure to do so; whereas groups like Hizbollah and Hamas are engaged in such negotiations because they have forced Israel to submit to them.

The Guardian (H/T The Angry Arab — great to see him refer to The Guardian as “white supremecist”!) carried an interview with Samir Kuntar where he disputes the Israeli narrative. Predictably, the PFLP fighters were trying only to take Danny Haran hostage, and even told him (in Arabic) to leave his daughter behind. Equally predictably, returning fire from Israeli police probably killed Danny and his four year old daughter. Except,

Samir Qantar’s version of the events of April 22, which have been articulated here in his voice for the first time, is different from that of the security service personnel and Israeli civilians who were present.

And,

During his trial Qantar denied responsibility for the murder of the Haran family, despite the evidence of the pathologist, which proved that Einat Haran was killed by the force of a blunt instrument – most likely a rifle butt. The pathologist’s report also showed that Einat’s brain tissue was found on Qantar’s rifle.

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Occupation is good for you: US troop presence & economic growth

July 10, 2008 at 3:49 pm (Development, Economics) (, , , , , )

Given that the US is in the midst of a deeply unpopular occupation in the Middle East, in a new paper on SSRN, economists Garett Jones and Tim Kane ask a question conspicuous by its absence in the contemporary debate: “Is the presence of American forces in a foreign nation a help or hindrance to that occupied country’s development?”

The authors consider development, economic history and institutional economics literature, which suggest that security — as in the monopolisation of the use of force — is a precondition of growth. For instance, in Douglass North et al’s model (already covered in an earlier post) of social order development, the organisation of the state moves in linear fashion from a primitive, small band type order, through a limited access order or “natural state”, wherein an elite monopolises the use of force and limits access to power through patronage networks, to an open access order, where access to power is democratic and theoretically evenly distributed across society. According to this model, solving the question of violence is the first and possibly most important problem facing a society. Without monopolisation and the resulting high barriers to entry, activity in the markets for violence is likely to be extensive, and as a consequence actual economic activity is likely to be limited.

There are, then, theoretical reasons for believing that “troop presence”, broadly defined as a functioning security force, be it foreign or local, will be positively correlated with economic growth. Certainly, it is unlikely that chaotic and violent hollowed-out states will produce successful and dynamic economies.

Garett and Kane suggest that US troop presence might positively impact growth along three dimensions: improved security, the diffusion of improved technologies and institutions, and the increased aggregate demand effect of large numbers of relatively wealthy US soldiers. In fact they find that “countries hosting large numbers of U.S. troops experience large and persistent increases in their long-run growth rate.” In addition, they also show that “when a country hosts U.S. military troops, the quality of economic policy and economic institutions in that country generally improves.” The results indicate that “on average, an increase in troop levels of an order of magnitude is associated with a 0.3% higher long-term growth rate of per capita gross domestic product (GDP).”

Furthermore, these results are not simply driven by the experiences of Germany, Japan and South Korea. The authors note that

countries that ranked 11th through 20th in troop deployments (a group that includes Turkey, Iceland, and Morocco) grew twice as quickly as the fifty countries with the lowest troop deployment levels. Thus the positive unconditional correlation between troop levels and growth is not driven by a few observations.

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Re-visiting the Climate Change Apocalypse

July 9, 2008 at 1:33 pm (Climate Change) (, , , )

Via Freakonomics, a new paper on climate change. Melissa Dell, Benjamin F. Jones, and Benjamin A. Olken examine historical data of the effects of climate change (meaning higher temperatures) on economic growth and come to conclusions that may, or may not, surprise you. Their findings are threefold:

  • Higher temperatures effect economic growth, not just output.
  • Higher temperatures have a range of effects, including reduced agricultural and industrial output, aggregate investment and political instability.
  • Higher temperatures only effect poor countries; in rich countries climate change has had little discernable impact historically.

This reinforces what I feel intuitively: that climate change is not the problem per se, the real problem is poverty and its interaction with higher temperatures. Therefore, policies that stymie growth in order to mitigate the effects of climate change or prevent further climate change must be approached with care. In fact, based on the evidence Dell et al. have produced, out of the three possible broad responses to climate change — mitigation, adaption and sustainable economic development — sustainable economic development looks the wisest by far.

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Cartographies of Conflict

July 8, 2008 at 4:50 pm (Cartographies of Conflict) (, , , , )

Via MESH, two fascinating maps of geopolitical hot zones. The first is from Heartland: Eurasian Review of Geopolitics, and is a map of the troubled borderland between Afghanistan and Pakistan, which shows jihadist flows, sites of conflict and contested tribal areas.

The second is from Lebanon-Support, and indentifies vulnerable areas and “flash-points” within Lebanon. The map itself is a kind of palimsest, where a series of layers (political, confessional, security and economic) are drawn over the terrain of Lebanon.

Click on the thumbnails to view the images.

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Recommended Reading: Dysfunctional Global Economy Edition

July 8, 2008 at 12:50 pm (Recommended Reading, Uncategorized) (, , , , , , , , )

VoxEU launches a free book compiling all of its columns on the subprime crisis. Extensive in scope and filled with contributions from economists like Stephen G. Cecchetti, Willem Buiter, Charles Wyplosz and Marco Onado. A must read: The First Global Financial Crisis of the 21st Century.

Essential macro forecasting from Nouriel Roubini’s Global Economonitor. Referencing a recent paper, Roubini predicts, and lists ten reasons for, the downfall of the Bretton Woods 2 system. Will the Bretton Woods 2 (BW2) Regime Collapse Like the Original Bretton Woods Regime Did? The Coming End Game of BW2.

From The Guardian, news of a secret World Bank report, according to which biofuels have pushed up global food prices by some 75%. The WSJ Environmental Capital blog puts this hard to believe figure in some kind of context, then demolishes it. Turns out that the “secret report” was nothing more than an unpublished exploratory working paper, which, due to the interest generated from The Guardian “leak”, will be published by the World Bank at the end of the week with a much more reasonable figure for biofuel influence.

Doug Noland of Prudent Bear — after his invaluable weekly “credit bubble bulletin” round up — explains in Starbucks, the “Core,” and Conventional Mortgages why the closures of 600 Starbucks coffee shops in the US is emblematic of the troubles facing corporations after the credit boom has bust and the era of easy money has come to an end.

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The Unravelling of the Israeli War Machine

July 4, 2008 at 2:48 pm (Military doctrine) (, , , , )

A couple of years ago, the PoMo-blogosphere was going a bit nuts to the tune of an article by Eyal Weizman, published in UK art magazine Frieze, called Israeli Military Using Post-Structuralism as “Operational Theory”’. In it, Weisman charts the IDF’s growing engagement with post modernist architectural writers and — especially galling to the PoMo left — legendary French theorists Gilles Deleuze and Felix Guattari. According to Weizman,

The reading lists of contemporary military institutions include works from around 1968 (with a special emphasis on the writings of Gilles Deleuze, Félix Guattari and Guy Debord), as well as more contemporary writings on urbanism, psychology, cybernetics, post-colonial and post-Structuralist theory

Which in many ways sounds like the ideal reading list for any university programme, or just the tags of an average thread over at Hyperstition. One can understand the reaction of superstitious leftists, though. Reappropriation of the post-Structuralist, post-left canon seems almost preordained. “Guy Debord is being read by the IDF to help them oppress Palestinians” — on some primal, conspiratorial level, that makes a kind of sense. And of course, this appropriation was also evidence of the essentially unradical nature of Deleuze and Guattari to both traditional leftists and newer strains of Zizeck and Badiou reading refuseniks. If Foucault had said that, “”someday this century will be known as Deleuzian,” here was the perverse proof.

They should all be pleased, then, to learn that the IDF’s obsession with hard to understand, wordy French philosophers was part of the reason for the strategic and operational blunders that led to its disasterous performance in the Second Lebanon War in summer, 2006. Avi Kober, in an excellent, prize winning, must-read paper in The Journal of Strategic Studies, pieces together causes of Israeli under-performance, and discovers that one significant problem was the fixation of the IDF officer corps with pretentious post-modern philosophy. Kober disdainfully notes that, under the influence of the colourful IDF Brigadier General (Ret.) Shimon Naveh, “IDF officers in military academies and colleges started learning the writings of great architects instead of the writings of the masters of war.” My favourite quote, however, regards the equally confusing language of EBO:

Yoram Yair, who investigated the 91st Division’s functioning during the Second Lebanon War, found out that using terms like ‘swarmed, multi-dimensional, simultaneous attack’ in orders issued by the division’s commander came at the expense of a simple and straightforward definition of objectives and missions.

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